Shares of banks and other financial institutions rose alongside Treasury yields.
An orderly rise in yields should bolster bank profitability, and the prospects of higher rates has caused the sector to outperform this year.
The SPDR Select Financials Sector exchange-traded fund, which tracks the financials industry group on the Standard & Poor's 500, closed up by more than 2% on Friday, bringing its gains for the year to date to more than 13%. That confirms strategist theories that money was shifting from the tech sector, which is more or less flat for the year to date after this week's rout.
One money manager said fears about a spike in yields are overdone. "Nothing in Powell's comments suggests to us that the path for interest rate hikes or the terminal rate is different, and it was always unlikely that the Fed would act to control yields while financial conditions remain so loose," said analysts at money manager UBS Global Management, in a note to clients.
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(END) Dow Jones Newswires